Thomas -
<<Does anybody remember what management guidance was when they announced results in April 96? A faint hope only, I know, but this would be helpful.>>
I believe the sequential revenue went from $104M to $90M, and that this was immediately reflected almost exactly in the analysts' revenue projections, so the guidance was presumably on the money. This is all from memory and I can't back it up. At that time, the guidance was not as specific in the published earnings reports as it is now. The difference between now and then is that the problem followed a period of unsustainable over-ordering which eventually needed 3 quarters to work down the excess inventory. Sequential revenue gains had previously exceeded 10% for 2 or 3 quarters. Now we are not in that situation of overshipments into a normal to strong economy, rather we are seeing past normal shipments into a possibly weakening economy. If you look at the flat quarters, the impacts on margins was minimal, as presumably the older and less productive fab lines in CA were allowed to stand down. This will undoubtedly be the case again as some of the older lines are already slated for decommission, in a sense. Unless the economy really falls out of bed, which is not impossible, the margins should hold up well, as mentioned in the published release.
Regards, Don |
